Eliminating credit card debt is difficult, but doable

People who have been struggling for months or years to eliminate their credit carddebt can take heart from others who have achieved this goal.

For example, a recent CNNMoney.com report profiled several consumers who now live on a “cash only” basis after having eliminated debts that in some cases exceeded $20,000. The report noted that some difficulties come up from making such changes, like keeping track of purchases, dealing with sudden expenses, and making travel reservations.

In most cases, these people continue to use debit cards as well as cash, notes CNNMoney.com, and things like emergency savings reserves and carefully-drawn budgets are standard practice for them as well.

Even if the dream of a debt-free life is far away or feels impossible for many Americans, it hasn’t stopped people from making considerable progress since the recession got underway. In the third quarter of 2008, the nation’s combined revolving consumer credit debt peaked around $957.3 billion. In the latest figures from the Federal Reserve, that debt had fallen to $888.1 billion, averaging a decline of about $8 billion per month.

Later in the winter, one important detail to watch for will be whether consumers managed to keep their credit card debts falling during the holiday shopping season. If they did do so, this could be considered evidence that consumers truly are serious about reducing debt and that the recession has produced some long-lasting ways in how people manage their money.

Upcoming federal credit card reforms could make it easier for people to stay on top of their debts by limiting the high interest rates and fees that companies can charge for things like making a payment a few days late. Consumers are also likely to remain highly motivated to tackle their debts when considering how companies have been finding controversial new ways to squeeze extra revenue from them.

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Some people are moving beyond credit card debt to focus primarily on cash.

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